Study On The Legal Mechanism Of The Disposal Of Non-performing Assets

The topic of this paper is the study of the legal mechanism of the disposal of non-performing assets.The selected topic refers to the bad assets which are only the bad assets of banks,and refers to the assets which can not be expected to return to the bank under the actual conditions.Take credit,for example,the interest on the loan can not be recovered on time and in full,and even the principal can not be recovered or recycled less.On 1998,the people’s Bank of China promulgated the "loan risk classification" principle to guide the management of banks,according to a series of factors such as the repayment ability of people have to recover the debt,lending the possibility of loans,will be divided into normal,attention,substandard,doubtful and loss,including subprime loans,doubtful loans and the loss of the loan refers to specific non-performing assets.In 1999,the State Council and the people’s Bank of China has approved the establishment of the four Asset Management Co,respectively Chinese Huarong Asset Management Limited by Share Ltd,China the Great Wall asset management Limited by Share Ltd,China Orient Asset Management Limited by Share Ltd,China Cinda Asset Management Corp,were carried out as follows: business acquisition of non-performing assets,entrusted with the operation of financial institutions,non-performing assets management,investment and disposal of creditor’s rights;on equity,equity assets management,investment and disposal;foreign investment;the sale of securities;issuance of financial bonds and interbank lending to other financial institutions and commercial financing;bankruptcy management;financial,legal,investment and risk management consulting and advisory and asset;project evaluation;approval of asset securitization,financial mechanism of trusteeship and liquidation industry Non performing assets of non-financial institutions;other business approved by the banking regulatory authority under the state council.Among them,the four major Asset Management Co to bank non-performing assets management,investment and disposal is its main business.Since the beginning of 2012,local governments have also set up the local Asset Management Co,have issued "financial enterprise bulk transfer of non-performing assets management measures","on the local Asset Management Co tocarry out financial firms to acquire bulk non-performing assets disposal business accreditation conditions and other related issues notice" allow the provinces to set up AMC in non-performing assets within the scope of this province and the bulk acquisition of financial enterprises the disposal of business,then the local AMC list continued expansion,as of now,Jiangsu Zhejiang,Anhui,Guangdong,Shanghai,Beijing,Tianjin,Chongqing,Fujian and Liaoning five places have been gradually set up Asset Management Co.Visible from the institutional level,at present,China’s disposal of non-performing assets of professional institutions began in recent years,and under the government’s control of slow progress,for the disposal of non-performing assets in China opened up a broad market.The accelerated disposal of non-performing assets by commercial banks and financial Asset Management Co will maximize the preservation of assets and reduce losses,and will play a role in escorting the development of China’s national economy.This is the social significance of the author’s selected topic.However,when dealing with the problem of non-performing assets,the banks or asset management companies in Shanghai are subject to historical reasons,policy impact,legal system,judicial system and other factors,there are many problems.In this article,based on the legal panorama of the disposal of non-performing assets,after a brief introduction of the disposal methods of non-performing assets,the author starts with the analysis of the legal environment and the legal restrictions on the specific disposal methods of non-performing assets when banks and asset management companies dispose of non-performing assets,aiming at the legislation of the disposal of non-performing assets and the specific disposal methods of non-performing assets.Based on the legal basis,the institutional environment for the disposal of non-performing assets and the matching system for the disposal of non-performing assets,the macro-level legal mechanism for the disposal of non-performing assets in China is constructed and corresponding suggestions are put forward.